Cincinnati Children’s Employees: Managing Your Retirement Post-Pension Freeze

(Note:  Wealthquest is not an agent of, nor otherwise affiliated with, Cincinnati Children’s.)

You’ve always counted on your pension being there later in life. But what do you do when your benefits change?

On January 1, 2026, Cincinnati Children’s introduced enhanced 403(b) contributions based on years of service. This shift gives employees more flexibility and control over their retirement savings, but it also means the responsibility for retirement planning is now on you.

If your pension was a key part of your financial future, you need a plan. Now is the time to evaluate your savings strategy, maximize your new benefits, and make sure you’re on track for retirement.

Many companies and hospitals are moving away from traditional pensions in favor of defined-contribution plans like 403(b)s. These plans give employees more control over their investments and increase portability if they change jobs. Cincinnati Children’s decision aligns with this broader industry shift, and it’s not a sign of financial stress for the hospital.

Maximizing Your Retirement Savings After the Pension Freeze

With Cincinnati Children’s shifting from a pension to enhanced 403(b) contributions, you have more control--and responsibility--over your retirement savings. To stay on track, you need a strategy to maximize your new benefits and fill any gaps left by the pension freeze.

What Steps to Take Now

1. Confirm you are receiving the appropriate employer contribution.

The Cincinnati Children’s Contribution (CCC) Plan officially replaced active pension growth. The hospital now makes automated, employer-only flat contributions between 5% and 10% of your salary directly into your retirement account based on your years of service. If you qualify for the transitional "55-point test," make sure your additional 4% bump is actively reflecting on your stubs.

2. Maximize your personal 403(b) contributions.

Since you can no longer accumulate traditional pension credits, maximizing your personal contributions is the most effective way to protect your long-term retirement timeline. The IRS has updated the maximum allowable limits for the 2026 tax year:

• Under Age 50: You can personally defer up to $24,500.
• Ages 50–59 or 64+: You can save an additional $8,000 catch-up contribution, for a total of $32,500.
• Ages 60–63 ("Super Catch-up"): Under Secure 2.0 rules, you qualify for an enhanced catch-up limit of $11,250, bringing your total allowable employee contribution to $35,750.

A critical legislative change takes effect in 2026 for high-earning hospital staff. If your prior-year (2025) FICA wages exceeded $150,000, the IRS now requires all age-50+ catch-up or super catch-up contributions to be made as after-tax Roth 403(b) contributions. While you lose the immediate upfront tax break on those catch-up dollars, they will grow and distribute completely tax-free later in life.

3. Choose the right investment strategy.

With a 403(b), your investment decisions will determine your investment performance. Review your options and ensure your portfolio aligns with your risk tolerance and long-term goals.

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How Wealthquest Helps Cincinnati Children's Employees

While the pension freeze impacts your retirement income, it also provides you with greater control over your own savings. This transition can feel overwhelming, but you don’t have to navigate it alone. We are here to help you manage these changes, including selecting the right investment strategy within your Cincinnati Children’s 403(b) plan.

Diversifying Beyond Your 403(b)

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While the 403(b) is a strong foundation, relying on one account for retirement isn’t ideal. 

Consider additional savings strategies:

• Roth IRAs offer tax-free withdrawals in retirement, giving you flexibility to manage taxes later in life.
• Brokerage accounts don't have the funding limits that retirement accounts do. This will allow you to put even more away for retirement. Plus, distributions from a brokerage account aren’t subject to age restrictions and if you do take money out, you only have to pay taxes on any investment gain that is realized as a result.
• If available to you, Health Savings Accounts (HSAs) can be a tax-efficient way to save for medical costs in retirement.

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The pension freeze is a significant change, but you have options. Taking a proactive approach now will help ensure you’re financially prepared for retirement.

Audit your total compensation package.

This retirement transition coincides with the hospital's new, stricter spousal medical coverage restrictions, your household may be facing higher baseline expenses if a spouse had to phase off the Cincinnati Children's health plan. If you received a transitional payment for dropping spousal coverage, consider routing those cash injections directly into your personal investments to offset the lifetime gap left by the frozen pension.

Stay Proactive and Informed

Financial planning isn't a one-time event. You should actively monitor legislative updates, evolving Cincinnati Children’s policies, and shifts in your personal life goals. A dynamic plan adapts to these moving parts, ensuring your financial strategy remains aligned with your long-term vision rather than reacting to surprises.

Plan around the pension "Lock-In."

Keep in mind that while your previously accrued pension balance remains perfectly safe and intact, it cannot be rolled over into an outside IRA or your new 403(b) while you are actively employed at Cincinnati Children’s. Because this asset is structurally illiquid until separation or standard retirement, your overall portfolio allocation must be carefully adjusted to balance this fixed, immovable asset against your more flexible 403(b) investments.

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